In Nursing Home Death Case, PA Supreme Court Holds Federal Arbitration Act Preempts Application of Conflicting State Bifurcation Rule

12.21.16

The Pennsylvania Supreme Court recently issued a decision with significant overtones regarding Pennsylvania courts' interpretation of the Federal Arbitration Act (Act). In so doing, the Pennsylvania Supreme Court reversed the Superior Court's affirmance of a trial court's holding which denied a nursing home defendant's motion to bifurcate wrongful death and survival actions in a case where the nursing home sought to compel arbitration of the survival claim under a valid arbitration agreement. The Court held that the Federal Arbitration Act, along with United States Supreme Court precedent favoring arbitration agreements, mandates the application of the Federal Arbitration Act over conflicting state law.

The central issue in the case of Taylor v. Extendicare Health Home Facilities, Inc., No. 19 WAP 2015 (Pa. Sept. 28, 2016), was whether the Act overrode the procedural mechanism contained in Pennsylvania Rule of Civil Procedure 213(e), which states "a cause of action for the wrongful death of a decedent and a cause of action for the injuries of the decedent which survives his or her death may be enforced in one action, but if independent actions are commenced they shall be consolidated for trial." The majority opinion, authored by Justice David Wecht, held that the Act preempted the application of Pa. R.C.P 213(e) and that the plaintiff's survival action claims were required to be arbitrated pursuant to the terms of the arbitration agreement the plaintiff's decedent signed before the decedent's stay at the nursing home facility. Namely, the Act provides that arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract" 9 U.S.C. §2, and "[the Act] was intended to foreclose state legislative attempts to undercut the enforceability of arbitration agreements." Thus, whenever the compulsory joinder terms of Rule 213(e) serve to prevent the operation of a valid arbitration agreement by prohibiting the bifurcation of an arbitrable survival claim from a non-arbitrable wrongful death claim, they are preempted by the Act.

Comment: The Court's ruling in this case is significant on numerous levels, including the potential precedent it provides in all cases where there is a valid arbitration agreement in place and arbitrable survival action. The law in Pennsylvania as to the arbitrability of wrongful death claims appears to remain the same, however. Namely, such claims are not derivative of a decedent's rights and where only the decedent has signed an arbitration agreement, the wrongful death beneficiaries will not be bound by said agreement 

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